Tag: SFDC

A few weeks ago, I wrote about enterprise software vendors calling for an American version of GDPR with Microsoft announcing that it was building GDPR into its global product line as its standard privacy protocol.

On the Salesforce earnings call last week, CEO Marc Benioff observed that the software industry has been going through a “crisis of trust for the past six months” related to privacy and data ownership:

“From the European perspective the way they look at data is data belongs to you, it’s your data. Now for us at Salesforce, we understand that. We’ve had that position from the beginning. Our customers’ data belongs to them, it’s their data. I think in some cases, the companies that are start-ups and next generation technologies here in San Francisco, they think that data is theirs. I think the Europeans with GDPR have really flipped the coin, especially in advertising but in another areas saying hey, this data belongs to the consumer or to the customers, you guys have to pivot back to the consumer, you have to pivot back to the customer.”

Benioff once again called for a US privacy law similar to GDPR which provides “guardrails” around trust and safety. “This is going to help our industry,” said Benioff. ”It’s going to provide the ability for the customers to interact with great next generation technologies in a safe way.”

Benioff also warned that when AI technologies are indistinguishable from humans, trust will also be an issue.

It is less than 36 hours until GDPR becomes the law of the land in the EU Zone. As the regulation has extra-territorial privacy requirements, non EU companies, even those without a physical presence in the EU, are subject to its requirements with respect to communications with EU citizens and management of their data.

The US has a much weaker set of laws and there is concern that US firms are laggards with respect to compliance. However, a number of US technology firms have called for adoption of a US GDPR.

On Monday, Microsoft once again reiterated its belief that “privacy is a fundamental human right” and announced that GDPR will be their privacy standard globally.

“As people live more of their lives online and depend more on technology to operate their businesses, engage with friends and family, pursue opportunities, and manage their health and finances, the protection of this right is becoming more important than ever.”

Julie Brill, Microsoft Corporate VP & Deputy General Counsel

Companies, therefore, have a “huge responsibility” to protect and safeguard personal data.

Since GDPR was enacted in 2016, Microsoft has dedicated 1,600 engineers towards compliance. “GDPR compliance is deeply ingrained in the culture at Microsoft and embedded in the processes and practices that are at the heart of how we build and deliver products and services,” said Brill.

She noted, however, that GDPR is a “complex regulatory framework” subject to “ongoing interpretation” by regulators and feedback from customers. As such, the firm will “determine the steps that we all will need to take to maintain compliance.”

As a provider of corporate infrastructure, Microsoft views GDPR as an opportunity to differentiate itself and assist its customers with compliance on the Microsoft Cloud. “One of our most important goals is to help businesses become trusted stewards of their customers’ data,” said Brill. “This is why we offer a robust set of tools and services for GDPR compliance that are backed up by contractual commitments. For most companies, it will simply be more efficient and less expensive to host their data in the Microsoft Cloud where we can help them protect their customers’ data and maintain GDPR compliance.”

Salesforce and SugarCRM have also taken a strong position on GDPR calling for similar legislation in the US. “What we need is a national privacy law, and that will really not just protect the tech industry; it’s going to protect all the consumers,” said Salesforce CEO Marc Benioff.

This is not a new position for Salesforce. Back in 2014, Benioff said, “I’m all in favor of consumers having more power and more control over their data. As a consumer, you should have all of the rights. It’s like a cloud Bill of Rights. As a consumer or as an enterprise, you should have the right to be forgotten or to add or take away your data.”

As part of its compliance, the firm named their Senior VP of Global Privacy and Product Legal Lindsey Finch as their new Data Protection Officer. Finch has been with Salesforce for a decade with previous stints at GE (Privacy Counsel), the Federal Trade Commission, and Homeland Security.

“The official DPO designation is a natural outgrowth of our existing programme. My team and I will continue to partner across the company to foster a culture of privacy – designing, implementing, and ensuring compliance with our global privacy programme, including ensuring that privacy is considered throughout the product development lifecycle,” said Finch. “The top theme I’m hearing is that our customers are using the GDPR as an opportunity to focus on their privacy practices and putting their customers—oftentimes end-consumers—at the center of their businesses. The GDPR is a complex law, but putting the individuals to whom the personal data relates at the forefront, and focusing on their expectations and preferences, is a great starting point for compliance with the GDPR and other privacy laws.”

Finch described Salesforce’s approach to GDPR compliance:

“We started by kicking off a thorough review to ensure compliance across the company. The GDPR is an incredibly rich document—99 articles and 173 recitals across 88 pages! Our Privacy team broke this down into key principles and worked closely with our Technology & Products organization to review our compliance. We found that we were already in a really great place,

Since then, a lot of the work we’ve been doing has been to document how our customers can use our services to comply with some of the key GDPR principles, which we’ve published on our GDPR website. There is no finish line when it comes to GDPR compliance. While Salesforce currently offers the tools for our customers to comply with the GDPR, we will continue to release new innovations that help our customers achieve compliance success.”

Salesforce CMO Simon Mulcahy echoed Benioff and Finch at the Salesforce World Tour event in London last week. Mulcahy stated that many companies simply view GDPR as a compliance issue and nuisance, not an opportunity to align company interests with customer desires. “It is a compliance issue, but it’s also a phenomenal opportunity to give your customers what they want. What they want is to know that when they give you their data, you’re looking after it appropriately.”

“Benioff is right that we will need some regulation and I can’t see how we can set two standards–EU and US–so we’ll likely need to adopt what the EU has done or risk chaos. This also fits well into the narrative of the information utility. GDPR is another driver sending us toward utility formation for the information industry.”

Dennis Pombriant, Principal Beagle Research

Larry Augustin, CEO of SugarCRM noted that firms have been lax in their privacy and cyber security processes saying that self-regulation has proven to be insufficient with “too many incidents.”

“Data privacy issues are not going to go away. People are thinking a lot here now about GDPR, because Facebook, Twitter, and all of these issues keep coming. And Experian in the US, about managing personal information related to credit card data… there’s just a constant barrage of issues around data privacy and personal information,” continued Augustin. “Everyone has to address it, whether it’s in the context of GDPR or the next thing that’s going to come along. There is definitely a heightened awareness and interest.”

SugarCRM has built a data privacy manager into its CRM as a “command center” for the data privacy officer.

In my discussions with clients. they all admit to the regulations being a muddle that initially adds risk to their business models. The penalties are draconian, but the compliance requirements are ambiguous, particularly for B2B firms. As such, we are likely to be hearing about issues concerning GDPR compliance requirements over the next few years.

Salesforce told its Data.com Connect customers that the product will no longer be available as of May 4, 2019. As such, the firm will not renew any customers after May 3rd of this year, and users will not be able to license any points, contacts, or plans after May 3rd. However, users will be able to earn points through community updates through the expiration of the product. While Salesforce has not announced shutdown dates for the native Salesforce Data.com Clean and Prospector offerings, their shutdown is “currently targeted for some time in 2020.”

Data.com Connect contacts data will continue to “used in the maintenance of the Data.com Clean and Prospector products,” said the firm. “After the Data.com end-of-life is complete, the contact database may be archived by Salesforce.”

Data.com Connect is the successor to Jigsaw, which the firm acquired in 2010 for $142 million. Connect Members either purchased plans or earned points through adding and maintaining records within Connect. After acquiring the database, Salesforce realized that Jigsaw company data was too weak to be sold and partnered with D&B (now Dun & Bradstreet) to deliver the WorldBase company file alongside Jigsaw contacts. This partnership was in place until early 2017 when SFDC announced the end of the licensing relationship. Legacy customers continue to receive Data.com WorldBase account data, but the firm is encouraging clients to evaluate Lightning Data partnership offerings from Dun & Bradstreet, Bombora (intent), HG Data (technographics), DataFox, Clearbit, MCH (healthcare), and InsideView.

“We’ve built a powerful, flexible set of capabilities into the Salesforce platform we call the Lightning Data Engine. It uses sophisticated matching algorithms and machine learning to make it easy to implement and deliver strategic data and insights from trusted, third-party sources. Lightning Data apps give customers next-level data quality, enabling them to create more intelligent processes built on better, more targeted data, which improves CRM user adoption and ROI. Best of all, seamless integration requires minimal ongoing maintenance, and makes data readily available on any device without IT involvement.”

Salesforce.com

Dun & Bradstreet said that it expects Data.com revenues to decline 30% in 2018. The announcement that the Data.com Prospector and Clean products will be shuttered in 2020 is likely to expedite the revenue wind down.

I attended the Salesforce World Tour Event in Boston yesterday and came away a bit underwhelmed. I’ve attended it for the past four or five years, so that may be part of the reason I didn’t stay for the full day.

In attending, I had several topics top of mind:

What is the future of Data.com? Will it be phased out and when? If they are attriting 30% of their revenue this year (a Dun & Bradstreet estimate), how are they guiding their customers to AppExchange solutions in lieu of Data.com?

How is Einstein being infused into their Sales Cloud? How are they ensuring that Einstein Insights are based on accurate and timely data?

What is the future of SalesforceIQ CRM technology (it is being decommissioned in 23 months)?

Meeting with Sales and Marketing Intelligence vendors on the floor.

I stopped by several of their sales and platform booths, but nobody had any answers on Data.com. This is the second year in a row in which there was no mention of data or the future of B2B prospecting, data enrichment, or sales intelligence at the event. Salesforce has never been much of a data company. They botched Data.com from Jigsaw acquisition through decommission. A few months after announcing a detailed roadmap at Dreamforce, they cancelled their Dun & Bradstreet content partnership in early 2017.

But if you are going to build analytics into your platform, license the iconic Einstein name for it, and tout it as an enabling technology for all of your clouds, then maybe you should have a strategy for ensuring that Einstein Insights are based upon quality data.

I did get to see a quick demo of Einstein Insights for the Sales Cloud. It provides lead scoring with recommendations so a sales rep can see whether a lead is likely to convert (or other goals) and review the top reasons for the score. It even goes so far as to recommend additional contacts but fails to justify those names. It appeared the names were mined using the SalesforceIQ technology, but all that was demonstrated was the name — no title, level, or reason to reach out to that individual. Salesforce is on the right track here but needs to expand its explanations for lead scores to its contact recommendations.

As to sales and marketing intelligence, there was only one vendor on the floor — Zoominfo. They were demonstrating their new Clean and Complete services for Salesforce. Clean provides batch account, contact, and lead record enrichment while Complete provides account, contact, and lead record appends during data entry and batch upload. Due to the depth of the Zoominfo database, the Complete service has an 80% account match rate and a 65% contact match rate.

Both services support custom mapping. Pricing is based upon record volume.

The keynote lacked the energy of prior years when Keith Block, COO, performed the duties. While Sarah Franklin, EVP of Developer Relations did a fine job, Block is from Boston and made sure the event was localized. Missing this year were sports heroes (e.g. Tom Brady, Bill Belichick) and the Drop Kick Murphys. If you want to wake up a 10:00 AM keynote, the Drop Kicks and their Irish punk are a great way to do so.

I’m a sailor peg
And I’ve lost my leg
Climbing up the top sails
I’ve lost my leg!

I’m shipping up to Boston, whoa…

“I’m Shipping up to Boston,” Drop Kick Murphys

There was a presentation on Year Up (an inner city business training program) with a local success story, but the 75 minutes were basically rehashed Dreamforce partner videos and content with a focus on B2C. Even the B2B example, 21st Century Fox, was equally a promo for “Dead Pool 2” and other Fox properties as it was a demo of Quip and its marketing and project management tools. The distributor relations aspect of the story was a bit light.

So let’s bring back Keith Block next year and expand the exhibition space. The Hynes Exhibitor Floor was too crowded, too hot, and too noisy.

I don’t mean to grouse. Salesforce is a terrific company. They have a strong social mission, a market leading product, and an ability to keep things fun. It’s just that this year didn’t match prior Boston events, and the company has diversified into so many clouds and capabilities that the Sales Cloud and Sales Partner solutions get crowded out.

Salesforce announced another “beat and raise” quarter last week with strong revenue growth across all of its clouds and regions. Their Q4 earnings hit $2.85 billion, up 24% year-over-year (21% in constant currency). For the full year, revenues rose 25% (24% in constant currency) to $10.48 billion. SFDC has a three-year compound average growth rate (CAGR) of 25% with revenue nearly doubling over the period. Growth has been so rapid that their Q4 2018 revenue was more than their full FY 2014.

Salesforce claims it was the fastest enterprise software company to reach $10 billion in revenue and will be the fastest to hit $20 billion.

CEO Marc Benioff attributed ongoing growth to a number of factors including its sales team which drove a “blowout quarter,” lauding the “performance of that organization and their acuity.” Other factors included a growing set of CEO-level relationships, an “incredible increase in investment activity” fueled by the recent US corporate tax cuts, and digital transformation:

It doesn’t matter if they’re a consumer product goods company CEO or financial services or retail or any industry or any geography. Every CEO is thinking about their digital transformation. And I think you and I know that every digital transformation begins and ends with the customer.

This is very powerful. And it’s why we have so much activity in our company. Of course, we’re the number one customer company in the world. No other company in the history of the software industry has been as focused on customer-relationship management, but how companies can have a customer transformation at Salesforce.

And this, and this alone, focus, has accelerated our growth. You can see that in the numbers. So certainly, how we finished our year in fiscal year 2018 is not where we thought we would start. We raised guidance I think almost in each and every quarter, and yet we still ended up above that. And that’s why we’ve raised again here $150 million. This is the most we’ve ever raised in the history of the company, because we’re just ahead of where we thought we would be

So, we are, obviously $10 billion is now behind us, and $20 billion is ahead of us. And it’s our dream, we’re going to be the fastest to $20 billion.

But when you have $20 billion already on and off the balance sheet, you know that that is – we’re a huge step on the way there. So that’s what I couldn’t be more excited about the position the company is in, its competitiveness, its ability to perform, the quality of its customer relationships, the quality of the products, the integration of the acquisitions, the culture, Fortune number 1 best place to work. All of these things have come together in just a really beautiful way, and I’m extremely grateful.

Salesforce has several other factors fueling its growth: The annual Dreamforce event drew 170,000 attendees last year, the firm has a clear social mission that resonates well with millennial employees (and now decision makers), and it was an early mover into cloud computing, mobile-first design, IoT, partner ecosystems (AppExchange), and artificial intelligence.

Finally, being cloud only, the firm does not have to fight a rear-guard action to retain enterprise clients as they migrate to the cloud. So while SAP and Oracle must fight to retain their customer base as companies make the leap to the cloud, Salesforce is there to poach their new clients.

In a recent interview with CNBC, Salesforce COO Keith Block discussed the transformation of Salesforce since he joined 4 ½ years ago. Based on FY 2019 Guidance, revenue will have roughly trebled during his tenure as the firm transformed itself into a multi-cloud platform supporting companies of all sizes.

“We’ve moved very, very aggressively, both globally, in terms of our international expansion, as well as moving into the enterprise,” said Block. “And if you look at our business mix, you can see that the enterprise business has been on fire.”

SFDC also adopted a verticalization strategy last year beginning in financial services and healthcare. The initial offerings focused on wealth management and a Health Cloud, but the firm recently announced a retail bank solution. “So, we have deep industry expertise, deep industry knowledge. Our customer-facing teams are focused by industry. We’ve released products specific to those two industries.”

Over the past 24 months, Salesforce has emphasized CEO-level discussions concerning digital transformation. “We have a steady drumbeat of CEOs who are coming to us to talk about: What does digital transformation mean in my industry? What is your point of view? What is disruption? How can I leverage all these amazing technologies of cloud, mobile, social, data science, artificial intelligence in changing our business model? And it is a regular dialogue with the CEO.”

Block described his biggest challenge over the past few years as one of market awareness. “Some companies thought we were just in sales force automation and clearly we’re not; we are a customer success platform.”

A Salesforce Investor Day slide (Nov 2017) demonstrates the growth in TAM and revenue due to new clouds including commerce, industries, communities, and collaboration. Over the past four years, the firm has also added new platform capabilities including Lightning, Einstein, IoT, Heroku, Analytics, and Trailhead.

The firm also has undergone a cultural change “to think differently about the life cycle, the relationship, the strategic nature of going after those customers.”

Internationalization was also key to supporting global enterprises as enterprise companies need to provide global service.

Salesforce has also benefited from three annual releases instead of big bang offerings every few years. Block noted that both technology and markets change too rapidly for such approaches. “Increasingly, customers are embracing the notion of agile, very quick.”

One of the key themes of Dreamforce 2017 was the ability of companies to customize the branding and content within Salesforce clouds via “clicks, not code.”

The theme of this year’s Dreamforce was The Fourth Industrial Revolution. Following after revolutions driven by steam, electricity, and information technology, the fourth industrial revolution blurs the “physical and digital worlds” creating a wave of “innovation in technology” which is transforming the economy, society, and lives while creating new jobs, industries, and opportunities. This next wave is based upon intelligence. Elements include IoT, 3D printing, biotech, robotics, autonomous vehicles, nanotechnology, and quantum computing.

“This is what we call the fourth industrial revolution,” said Salesforce CEO Marc Benioff. “There’s all these amazing new technologies, things like autonomous vehicles and artificial intelligence and nanotechnology and mobile computing and all these things are really hitting at once. And companies are really transforming themselves and bringing all these new technologies in really to connect with their customers in new ways.”

Thus, elevators loaded with sensors now communicate back to the manufacturer and predict failures, calling for service prior to trapping people. Likewise, with tires, “if the tire blows, nobody knows; but in the future, if the [smart] tire blows, everybody knows.” So, firms like Kone (elevators) and Michelin (tires) are now B2B2C companies. In the future, if a tire is about to blow, it will communicate to the autonomous vehicle to pull over.

“Every company is getting closer to their customers. We’ve been talking about this for years. It doesn’t matter if you’re a B2B company or a B2C company, everybody’s becoming a B2B2C company.”

Salesforce and its customers are “delivering personalized one-to-one engagement at scale,” said Stephanie Buscemi, EVP of Product Marketing. This is done “declaratively, with clicks and not code.” Through the Salesforce Data Management Platform, ads are customized and delivered cross-device, allowing companies to redisplay ads or present new advertisements to their customers and prospects.

Benioff cited a series of companies providing customer service and support through Salesforce platforms including Louis Vuitton, Marriot, Coca-Cola, T-Mobile, Adidas, and Ducati Motorcycles.

“Behind all these things…behind everything is a customer. And that’s what all of us do. We are working to connect with our customers in an incredible new way.”

Simplified customization, development, and branding were emphasized during the keynote. A set of customizable products provide a “smarter, more personalized Salesforce”:

MyTrailhead service supports custom branding, content, and learning paths that allows firms to onboard and train employees on desktops and phones. Tools include quizzes, reference links, trails, and badges. Salesforce Trailhead content is also available.

MyLightning customization provides an app builder with custom pages, a Lightning theming and design system, Lightning Flow, Components, and Bolts which operate automatically on both desktops and phones. Designers will have access to dynamic components which are conditionally displayed.

MySalesforce branded “mobile apps without code” can be uploaded to the Google Play and App Store.

Based upon customer feedback, SFDC has shifted from IoT as a separate platform to an integrated feature of the CRM platform which also operates “declaratively without code.”

Benioff admitted that the Fourth Industrial Revolution is creating concerns and wondered whether it is “uniting us or dividing us. Are we more connected or somehow less connected?”

He also asked whether there is more or less equality in the World.

“There is this stress being created by this fourth industrial revolution. Yes, we have this promise of this new connected World. But what is it doing to us? And what are other actors doing around the World using these technologies? Are they changing our society? Are they changing our elections? What are they doing with this technology?”

Benioff is looking at the Trailblazers attending Dreamforce as the Customer Innovators, Technology Disruptors, and Global Shapers to ensure that the next wave is directed in a positive direction. “You have all these new tools at your fingertips, these incredible new technologies, but you are doing some amazing things in the World. You are changing your companies. You are steering this technology in the right direction. I’m so confident in who you are. I’m so confident in what’s in your hearts and where we are all going.”

Benioff noted that most technology is generally neutral in it effect upon society. It is therefore incumbent upon technologists, developers, and companies to deploy technology in a socially responsible manner which promotes greater equality. Benioff called for companies to fight for equality through equal pay, investing in schools, and opposing discriminatory laws. He also noted that it is the poor who are most hurt by environmental degradation and proudly stated, “we are a net zero cloud.”

IDC CRM Market Share (Courtesy: Salesforce 2017)

Benioff was also proud to have founded and led the leading CRM with an 18.1% market share (2016 IDC) nearly double that of Oracle (9.4%). Salesforce has the top solutions for sales (34.2%), service (33.7%), marketing (9.9%), and Platform-as-a-Service. Within the marketing cloud, Salesforce claims to offer the leading Data Management Platform and commerce Platform.

What’s more, the firm is on track to be the fastest enterprise software company to hit $12.5 billion in revenue. They hit $10 billion this year and have FY19 guidance of $12.5 billion in year 20.

One of the issues facing businesses and policymakers is an increasing skills gap. Benioff proposed MyTrailhead as one of the tools to help address the problem of workers across many industries and skill levels. MyTrailhead provides a customized, branded training platform.

TechCrunch complained that this year’s Dreamforce lacked drama as it lacked new initiatives such as the social enterprise, artificial intelligence, and IoT. “They are a company that embraces the cutting edge, but this year lacked that kind of big announcement,” complained enterprise reporter Ron Miller. To be fair, though, the company has rolled out a series of new platforms, clouds, and acquisitions over the past few years. A year with few fireworks is not necessarily a year without forward progress for Lightning, Quip, Einstein, Trailhead, and platform customization.

The conference remains a monster with 170,000 registered participants joining in San Francisco and millions of online views.